Ireland: Ryanair Fears €20m Pilot Hit
From the Sunday Times, 31 Dec 2006. (Note for Mods - the ST's direct URL link may not be available to people outside the UK, hence the article is reproduced in full below) :
"Ireland: Ryanair fears €20m pilot hit
Brian Carey
LOW-FARE airline Ryanair faces sanctions and damages in excess of €20m if it loses a series of cases to be taken by Irish pilots and due to be decided in the coming year. The decision could also see future pay claims adjudicated by the Labour Court rather than the airline.
The key date for the airline is January 31 when the Irish supreme court will rule whether the Labour Court and the Labour Relations Commission have jurisdiction over industrial disputes at the airline. If the Supreme Court rules in favour of the pilots, it will lead the way to a string of grievances being adjudicated.
A total of 100 pilots have lodged victimisation claims against the airline through the state industrial relations machinery. The airline faces sanctions of up to twice the annual salary of the pilots in each case if the claims are proven. Ryanair says that its pilots earn at least €100,000 per annum.
The airline is also facing a separate series of High Court actions from 64 pilots who claim that their constitutional rights were infringed by a controversial training bond.
The airline agreed to pay the cost of retraining pilots on new Boeing aircraft at a cost of €15,000 but only if the pilots signed a bond agreeing not to leave the airline for five years. The bond also stipulated that the pilots would have to repay the training costs if the company was forced to negotiate with any trade union during the same period.
The pilots claim the terms of the bond infringe their constitutional rights, particularly the right to freedom of association and the right to allow trade unions to negotiate on their behalf.
In a filing with the Securities and Exchange Commission, Ryanair estimates that damages could total €6m if the pilots are successful.
A supreme court ruling in favour of the pilots in January could also result in the Labour Court deciding on compensation and working conditions for Ryanair pilots. It would mean Ryanair’s system of payment would be open to scrutiny by a third party for the first time.
Ryanair has consistently maintained that its pilots’ pay is among the highest of all short-haul airlines, but a large chunk of salaries is paid through productivity and incentive bonuses. Ryanair’s SEC filing says some 42% of a pilot’s salary is payable through bonuses.
The filing also says the airline agreed to a basic salary increase of 1.8% for pilots at 13 of its bases last April. Pilots at Dublin “chose not to participate in these negotiations and as a result received no pay increase”. Pilots who were part of a 2000 share option plan were eligible to earn €60,000 before tax from December 1, 2005, the filing says, “and generally did so”."